U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

                For the quarterly period ended December 31, 2000

                                       OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

From the transition period from _________________ to ______________________

Commission File Number 0-19899

                             U.S. HOME & GARDEN INC.
             (Exact name of registrant as specified in its charter)


         Delaware                                           77-0262908
(State or other jurisdiction                                IRS Employer
of incorporation or organization)                     (Identification Number)


655 Montgomery Street
San Francisco, California                                      94111
(Address of Principal Executive Offices)                    (Zip Code)

                                  (415)616-8111
              (Registrant's Telephone Number, Including Area Code)

Indicate by check whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes_X_   No____


Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

As of January 30, 2001 there were 17,638,379 shares of the issuer's common
stock, par value $.001 per share, outstanding.


<PAGE>


Part I. -  Financial Information

Item 1. -  Consolidated Financial Statements

Consolidated balance sheets as of June 30, 2000
and December 31, 2000 (Unaudited)                                            1-2

Consolidated statements of income for the three months
and six months ended December 31, 1999 and 2000 (Unaudited)                    3

Consolidated statements of cash flows for the six months
ended December 31, 1999 and 2000 (Unaudited)                                 4-5

Notes to consolidated financial statements                                   6-8

Item 2. -  Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                        8-14

Item 3. -  Quantitative and Qualitative Disclosures About Market Risk         15


Part II. - Other Information

Item 1. -  Legal Proceedings                                                  16

Item 2. -  Changes in Securities                                              16

Item 6. -  Exhibits and Reports on Form 8-K                                   16

Signatures                                                                    17


<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                                     Consolidated Balance Sheets

================================================================================

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                 June 30, 2000          2000
                                                                 -------------       ------------
                                                                                     (Unaudited)
Assets

Current
<S>                                                              <C>              <C>
   Cash and cash equivalents                                     $  7,338,000     $  6,193,000
   Restricted cash                                                  1,582,000        1,582,000
   Accounts receivable, less allowance for doubtful accounts
     and sales returns of $1,199,000 and $479,000                  19,972,000       11,291,000
   Inventories                                                     12,843,000       18,523,000
   Prepaid expenses and other current assets                          606,000          848,000
   Refundable income taxes                                                 --        1,204,000
   Deferred tax asset                                                 210,000          210,000
----------------------------------------------------------------------------------------------
Total Current Assets                                               42,551,000       39,851,000

Deferred Tax Asset                                                         --        2,217,000

Property and Equipment, net                                        13,622,000       14,838,000

Intangible Assets
   Excess of cost over net assets acquired, net                    73,395,000       71,856,000
   Deferred financing costs, net of accumulated
     amortization of $372,000 and $469,000                          3,093,000        2,995,000
   Product rights, patents and trademarks, net of
     accumulated amortization of $47,000 and $65,000                  555,000          579,000
   Non-compete agreement, net of accumulated
     amortization of $106,000 and $120,000                          1,404,000        1,390,000
   Package tooling costs, net of accumulated
     amortization  of $929,000 and $1,150,000                       1,359,000        1,333,000
   Exclusivity agreements, net of accumulated
     amortization of $62,000 and $264,000                           1,398,000        1,353,000

Officer Receivables                                                   655,000          707,000

Other Assets                                                          513,000          488,000
----------------------------------------------------------------------------------------------
Total Assets                                                     $138,545,000     $137,607,000
----------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.

                                                                               1
<PAGE>


                                        U.S. Home & Garden Inc. and Subsidiaries

                                                     Consolidated Balance Sheets

================================================================================

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                               June 30, 2000        2000
                                                               -------------     -----------
                                                                                 (Unaudited)
Liabilities and Stockholders' Equity
Current
<S>                                                          <C>                <C>
   Current portion of lines-of-credit                        $   3,125,000      $  16,375,000
   Accounts payable                                              6,187,000          5,746,000
   Income taxes payable                                          2,413,000               --
   Accrued expenses                                              2,260,000          2,624,000
   Accrued commissions                                           1,296,000            640,000
   Accrued co-op advertising                                     1,143,000            489,000
   Accrued rebates                                               1,075,000            870,000
---------------------------------------------------------------------------------------------

Total Current Liabilities                                       17,499,000         26,744,000

Acquisition Line of Credit, less current portion                13,875,000         11,625,000
Deferred Tax Liability                                             185,000               --
Other Long Term Liabilities                                        792,000            876,000
Company Obligated Mandatorily Redeemable
  Preferred Securities of Subsidiary Trust Holding
  Solely Junior Subordinated Debentures                         56,980,000         56,951,000
---------------------------------------------------------------------------------------------
Total Liabilities                                               89,331,000         96,196,000
---------------------------------------------------------------------------------------------
Minority Interest in Equity of Affiliate                         4,111,000          3,648,000
---------------------------------------------------------------------------------------------

Stockholders' Equity
   Preferred stock, $.001 par value - shares authorized,
    1,000,000; no shares outstanding                                    --                --
   Common stock, $0.001 par value-shares authorized,
    75,000,000; 21,751,000 and 21,433,000 shares
     issued at June 30, 2000 and December 31, 2000                  22,000             21,000
   Additional paid-in capital                                   51,409,000         51,745,000
   Retained earnings (deficit)                                   4,359,000         (1,389,000)
---------------------------------------------------------------------------------------------
                                                                55,790,000         50,377,000

Less: Treasury Stock, 2,554,000 and 3,664,000 shares
      at cost at June 30, 2000 and December 31, 2000           (10,687,000)       (12,614,000)
---------------------------------------------------------------------------------------------
Total Stockholders' Equity                                      45,103,000         37,763,000
---------------------------------------------------------------------------------------------
                                                             $ 138,545,000      $ 137,607,000
---------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.



                                                                               2
<PAGE>


                                        U.S. Home & Garden Inc. and Subsidiaries

                                               Consolidated Statements of Income


================================================================================

<TABLE>
<CAPTION>
                                                           Three Months Ended                   Six Months Ended
                                                                December 31,                     December 31,
                                                  --------------------------------    ------------------------------
                                                      1999               2000               1999             2000
--------------------------------------------------------------------------------------------------------------------
                                                           Unaudited                               Unaudited
                                                  --------------------------------    ------------------------------

<S>                                               <C>               <C>               <C>               <C>
Net Sales                                         $ 14,145,000      $ 11,369,000      $ 27,130,000      $ 24,480,000
Cost of Sales                                        7,420,000         5,979,000        14,596,000        13,403,000
--------------------------------------------------------------------------------------------------------------------
Gross Profit                                         6,725,000         5,390,000        12,534,000        11,077,000
--------------------------------------------------------------------------------------------------------------------
Operating Expenses
   Selling and shipping                              3,904,000         3,673,000         7,372,000         8,004,000
   General and administrative                        3,206,000         4,592,000         6,174,000         8,635,000
   Depreciation                                        400,000           696,000           783,000         1,358,000
   Goodwill amortization                               731,000           784,000         1,452,000         1,567,000
   Other amortization                                  105,000           269,000           209,000           547,000
--------------------------------------------------------------------------------------------------------------------
                                                     8,346,000        10,014,000        15,990,000        20,111,000
--------------------------------------------------------------------------------------------------------------------
Loss from Operations                                (1,621,000)       (4,624,000)       (3,456,000)       (9,034,000)
Other Income (Expense)
   Investment income                                    59,000           111,000           162,000           246,000
   Interest expense                                 (2,003,000)       (1,763,000)       (3,851,000)       (3,426,000)
--------------------------------------------------------------------------------------------------------------------
Loss before Income Taxes,
   Minority Interests and
   Extraordinary Gain                               (3,565,000)       (6,276,000)       (7,145,000)      (12,214,000)
Income Tax Benefit                                   1,600,000         3,070,000         3,200,000         6,036,000
Minority Interest in Loss of Affiliates                   --             209,000              --             426,000
--------------------------------------------------------------------------------------------------------------------
Loss Before Extraordinary Gain                      (1,965,000)       (2,997,000)       (3,945,000)       (5,752,000)
Extraordinary gain on purchase of Trust
   Preferred Securities, net of income taxes              --                --                --               4,000
--------------------------------------------------------------------------------------------------------------------
Net Loss                                          $ (1,965,000)     $ (2,997,000)     $ (3,945,000)     $ (5,748,000)
--------------------------------------------------------------------------------------------------------------------
Basic and Diluted Loss per Common Share           $       (.10)     $       (.16)     $       (.20)     $       (.31)
--------------------------------------------------------------------------------------------------------------------
Weighted Average Common and Common Equivalent
   Shares Outstanding                               19,213,000        18,313,000        19,290,000        18,493,000
--------------------------------------------------------------------------------------------------------------------
</TABLE>
                    See accompanying notes to consolidated financial statements.


                                                                               3
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Six months ended December 31,                                         1999               2000
-------------------------------------------------------------------------------------------------
                                                                            (Unaudited)
                                                                   ------------------------------
Cash Flows from Operating Activities:
<S>                                                                 <C>              <C>
    Net loss                                                        $(3,945,000)     $(5,748,000)
    Adjustments to reconcile net loss to net cash
       provided by operating activities:
          Minority interest in loss of affiliate                           --           (426,000)
          Extraordinary gain                                               --             (4,000)
          Depreciation and other amortization                         2,568,000        3,472,000
          Deferred income taxes                                      (2,129,000)      (2,402,000)
          Compensation related to stock options                            --            160,000
          Proceeds from disposal of assets                                8,000             --
          Loss on disposal of assets                                     12,000             --
          Changes in operating assets and liabilities, net of
            assets acquired and liabilities assumed in business
            acquisitions:
               Accounts receivable                                    8,473,000        8,681,000
               Inventories                                           (1,806,000)      (5,680,000)
               Prepaid expenses and other current assets                149,000         (242,000)
               Accounts payable and accrued expenses                   (978,000)      (5,261,000)
               Other assets                                            (233,000)          25,000
-------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Operating Activities                   2,119,000       (7,425,000)
-------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
    Payment for purchase of businesses, net of cash
      Acquired                                                         (150,000)         (27,000)
    (Increase) decrease in officer receivables                            7,000          (52,000)
    Purchase of property and equipment                               (1,940,000)      (2,570,000)
    Purchase of intangibles                                            (369,000)        (236,000)
-------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                                (2,452,000)      (2,885,000)
-------------------------------------------------------------------------------------------------
</TABLE>

                                                                               4
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                           Consolidated Statements of Cash Flows

================================================================================

<TABLE>
<CAPTION>
Six months ended December 31,                                         1999               2000
--------------------------------------------------------------------------------------------------
                                                                            (Unaudited)
                                                                   -------------------------------

<S>                                                                <C>               <C>
Cash Flows from Financing Activities:
    Proceeds from issuances of stock                               $     54,000      $       --
    Purchases of mandatorily redeemable preferred securities               --             (22,000)
    Repurchase of common stock for treasury                          (1,788,000)       (1,927,000)
    Acquisition finance costs                                           (62,000)             --
    Proceeds from bank line-of-credit                                      --          11,000,000
    Other                                                                  --             114,000
--------------------------------------------------------------------------------------------------
Net Cash Provided by (Used) in Financing Activities                  (1,796,000)        9,165,000
--------------------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents                            (2,129,000)       (1,145,000)

Cash and Cash Equivalents, beginning of period                        2,936,000         7,338,000
--------------------------------------------------------------------------------------------------

Cash and Cash Equivalents, end of period                           $    807,000      $  6,193,000
--------------------------------------------------------------------------------------------------

Supplemental disclosure of Cash Flow Information
    Cash paid for interest                                         $  3,491,000      $  3,335,000
    Cash paid for taxes                                            $ (1,093,000)     $    (14,000)
--------------------------------------------------------------------------------------------------
                    See accompanying notes to consolidated financial statements.
</TABLE>

                                                                               5
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

1.   The accompanying consolidated financial statements at December 31, 2000 and
     for the three  months and six months  ended  December 31, 1999 and 2000 are
     unaudited,  but, in the  opinion of  management,  include  all  adjustments
     necessary for a fair  presentation of consolidated  financial  position and
     results of operations  for the periods  presented.  The results for the six
     months  ended  December  31,  2000 are not  necessarily  indicative  of the
     results of operations for a full year.

2.   Refer to the audited  consolidated  financial statements for the year ended
     June 30, 2000, for details of accounting policies and detailed notes to the
     consolidated financial statements.

3.   Inventories consist of:
                                          June 30, 2000       December 31, 2000
     --------------------------------------------------------------------------
                                                   (000)                   (000)
     Raw materials                              $ 8,390                 $ 9,894
     Finished goods                               4,453                   8,629
     --------------------------------------------------------------------------
                                                $12,843                 $18,523
     --------------------------------------------------------------------------


4.   The Company completed a financing agreement with Bank of America, N.A. (the
     "Bank") on October  13,  1998.  The  agreement  provided  for a $25 million
     revolving  acquisition  line of  credit  ("the  Acquisition  Facility")  to
     finance  acquisitions  and a $20 million working capital  revolving line of
     credit  ("the  Working  Capital  Facility").  Borrowings  under such credit
     facilities  bore  interest at variable  annual  rates chosen by the Company
     based on either (i) the London  Interbank  Offered Rate  ("LIBOR")  plus an
     applicable marginal rate, or (ii) the higher of 0.5% above the then current
     Federal Funds Rate or the Prime Rate of Bank of America, in each case, plus
     an applicable  marginal rate. The Acquisition  Facility terminates June 30,
     2001 and the outstanding  balance is payable in quarterly payments starting
     on June 30, 2001 and ending on March 31, 2004. The Working Capital Facility
     terminates  with the  balance due on  September  30,  2001.  The Company is
     required to maintain a zero balance,  under the Working  Capital  Facility,
     for at least 30 consecutive  days during the period from July 1 to December
     1 of each year. Moreover,  if the Company elects to terminate the financing
     agreement  prior to the expiration  date, the  outstanding  balance must be
     prepaid together with a premium of 0.5% of the total facility.

     The Company's  obligations under the Credit Agreement are guaranteed by its
     subsidiaries  and  secured by a security  interest  in favor of the Bank in
     substantially all of the assets of the Company and its  subsidiaries.  Upon
     the  occurrence of an event of default  specified in the Credit  Agreement,
     the  maturity  of loans  outstanding  under  the  Credit  Agreement  may be
     accelerated by the Bank, which may also foreclose its security  interest on
     the assets of the Company and its subsidiaries.

     Under the Credit Agreement,  the Company and its subsidiaries are required,
     among other  things,  to comply with (a) certain  limitations  on incurring
     additional indebtedness,  liens and guaranties,  on dispositions of assets,
     payment  of  cash  dividends  and  cash   redemption  and   repurchases  of
     securities, and (b) certain limitations on merger, liquidations, changes in
     business, investments,

                                                                               6
<PAGE>

                                        U.S. Home & Garden Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

     loans and advances,  affiliate  transactions and certain  acquisitions.  In
     addition,  the Company must comply with certain financial tests and ratios.
     A violation of any of these covenants constitutes an event of default under
     the Credit Agreement. At December 31, 2000, the Company was in violation of
     certain financial  covenants;  however, a waiver was obtained from the Bank
     which  includes a reduction  of the  Acquisition  Facility to $15  million,
     increases  the interest rate paid under both the  Acquisition  Facility and
     the Working  Capital  Facility by 100 basis points and requires the Company
     to pay a waiver fee.

5.   Segment  Reporting.  The  Company  operates in two  distinctive  reportable
     segments:    (1)   the   lawn   and   garden    industry   and,   (2)   the
     business-to-business   electronic  commerce  (E-Commerce)   industry.   The
     Company's  reportable  segments  are  business  units that offer  different
     products and services and are managed  separately due to different types of
     customers, technology, methods of distribution and marketing strategies.

     The accounting  policies of the segments are the same as those described in
     the summary of accounting policies. The Company evaluates performance based
     on  operating  income  or  loss  of  each  segment.   Transactions  between
     reportable segments are eliminated.

     The revenues,  operating income and  identifiable  assets of the reportable
     segments  are as follows for the period ended  December 31, 2000.  The lawn
     and garden segment was the only reportable segment at December 31, 1999.

<TABLE>
<CAPTION>
                                             Three Months                    Six Months
(000)                                     Ended December 31,             Ended December 31,
                                                 2000                           2000
                                           ------------------             ------------------
Revenues:
<S>                                             <C>                            <C>
      Lawn and Garden                           $  11,360                      $  24,471
      E-Commerce                                        9                              9
                                                ---------                      ---------
             Total Revenue                      $  11,369                      $  24,480
                                                =========                      =========

Operating (Loss):
      Lawn and Garden                           $  (2,099)                     $  (4,154)
      E-Commerce                                   (2,525)                        (4,880)
                                                ---------                      ---------
              Total Operating (Loss)            $  (4,624)                     $  (9,034)
                                                =========                      =========


                                            December 31, 2000
                                            -----------------

Identifiable Assets:
       Lawn and Garden                          $ 137,055
       E-Commerce                                  14,563
       Intercompany Eliminations                  (14,011)
                                                ---------
               Total Assets                     $ 137,607
                                                =========
</TABLE>

The Company does not have material revenue, operating income or assets outside
the United States.

                                                                               7
<PAGE>

6.   Subsequent  Event.  Subsequent to December 31, 2000, the Company decided to
     close the Ampro Industries,  Inc. facility in Michigan. The Company intends
     to continue to sell  products  that are  currently  being  manufactured  at
     Ampro's  Michigan  facility after the closure of the facility.  The Company
     expects to  recognize  approximately  $273,000  of expense  relating to the
     disposal of property and equipment at the Ampro facility and  approximately
     $1,000,000  of  expense  for  the  termination  benefits  to be  paid to 60
     employees  involved with the facility  during the quarter  ending March 31,
     2001. The restructuring is expected to be completed by September 30, 2001.


Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for  forward-looking  statements.  Certain  information  included in this Report
contains  statements that are  forward-looking,  such as statements  relating to
plans for the Company's  future  activities.  Such  forward-looking  information
involves  important  known  and  unknown  risks  and  uncertainties  that  could
significantly  affect actual results,  performance or achievements in the future
and,  accordingly,   such  actual  results,   performance  or  achievements  may
materially  differ  from  those  expressed  or  implied  in any  forward-looking
statements  made by or on behalf of the Company.  These risks and  uncertainties
include,  but are  not  limited  to,  those  relating  to the  Company's  growth
strategy,  customer  concentration,   outstanding  indebtedness,  dependence  on
weather conditions,  seasonality, expansion and other activities of competitors,
ability to  successfully  integrate  recently  acquired  companies  and products
lines,   the   Company's   ability  to   successfully   commercialize   its  new
business-to-business   e-commerce   website,   changes   in   federal  or  state
environmental laws and the administration of such laws, protection of trademarks
and other proprietary  rights,  and the general condition of the economy and its
effect on the securities markets and other risks detailed in the Company's other
filings  with the  Securities  and  Exchange  Commission.  The words  "believe,"
"expect,"  "anticipate,"  "intend" and "plan" and similar  expressions  identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these  forward-looking  statements which speak only as of the date the statement
was made.


General

U.S. Home & Garden Inc., ("the Company"), manufactures and markets a broad range
of  brand-name  consumer  lawn and garden  products  through  its  subsidiaries,
Egarden Inc.,  Ampro  Industries,  Inc.  ("Ampro"),  Easy Gardener,  Inc. ("Easy
Gardener"),   and  Golden  West   Agri-Products,   Inc.,  and  Easy   Gardener's
subsidiaries,   Weatherly   Consumer   Products  Group,  Inc.  and  Weed  Wizard
Acquisition  Corp. Since 1992, the Company  consummated  eleven  acquisitions of
complementary  lawn and garden  companies  and  product  lines for an  aggregate
consideration  of   approximately   $111  million  in  cash,  notes  and  equity
securities.  As  a  result  of  such  acquisitions,  the  Company  recognized  a
significant amount of goodwill, which, in the aggregate, was approximately $71.9
million, net of accumulated  amortization,  at December 31, 2000. The Company is
currently  amortizing such goodwill using the straight-line  method over various
time periods ranging from 5 to 30 years.

                                                                               8
<PAGE>


Results of Operations

The following table sets forth, for the periods indicated, certain selected
financial data as a percentage of net sales:

<TABLE>
<CAPTION>
                                          Three Months Ended         Six Months Ended
                                             December 31,               December 31,
                                             ------------              ------------
                                            1999        2000        1999        2000
<S>                                        <C>         <C>         <C>         <C>
Net sales                                  100.0%      100.0%      100.0%      100.0%
Cost of sales                               52.5        52.6        53.8        54.8
                                           ------------------      ------------------
Gross profit                                47.5        47.4        46.2        45.2
Selling and shipping expenses               27.6        32.3        27.2        32.7
General and administrative expenses         22.7        40.4        22.7        35.3
Depreciation and amortization                8.7        15.4         9.0        14.1
                                           ------------------      ------------------
Loss from operations                       (11.5)      (40.7)      (12.7)      (36.9)
Interest expense, net                      (13.7)      (14.5)      (13.6)      (13.0)
Income tax benefit                          11.3        27.0        11.8        24.7
Minority interest in loss of affiliate      --           1.8        --           1.7
                                           ------------------      ------------------
Loss before extraordinary item             (13.9)      (26.4)      (14.5)      (23.5)
Extraordinary item                          --          --          --          --
                                           ------------------      ------------------
Net loss                                   (13.9)%     (26.4)%     (14.5)%     (23.5)%
                                           ==================      ==================
</TABLE>

Three Months Ended December 31, 2000 Compared to Three Months Ended December 31,
1999

Net sales.  Net sales  decreased by $2.8  million,  or 19.6%,  to $11.4  million
during the three months ended  December 31, 2000 from $14.1  million  during the
comparable  period in 1999.  The decrease in net sales was primarily a result of
major customers moving to just-in-time inventory management programs,  which the
Company expects will cause revenues to shift to the third and fourth quarters of
its fiscal year.

Gross profit.  Gross profit decreased by $1.3 million, or 19.9%, to $5.4 million
for the three  months  ended  December  31,  2000 from $6.7  million  during the
comparable  period in 1999.  Gross profit as a percentage of net sales decreased
to 47.4% during the three  months ended  December 31, 2000 from 47.5% during the
comparable   period  in  1999.  The  decrease  in  gross  profit  was  primarily
attributable  to the  decrease  in net  sales and  reduced  pricing  on  certain
products sold to major retailers when compared to the December 31, 1999 period.

Selling and shipping expenses. Selling and shipping expenses decreased $231,000,
or 5.9% to $3.7 million  during the three  months  ended  December 31, 2000 from
$3.9 million during the comparable period in 1999. Selling and shipping expenses
as a  percentage  of net sales  increased to 32.3% during the three months ended
December 31, 2000 from 27.6% during the comparable period in 1999. This decrease
in expense and increase as a percent of net sales was primarily  attributable to
the decrease in net sales partially  offset by start-up  selling and development
costs for the Company's business-to-business e-commerce initiative Egarden Inc.,
included in the three months ended December 31, 2000.

General  and  administrative  expenses.   General  and  administrative  expenses
increased  $1.4 million or 43.2%,  to $4.6 million during the three months ended
December 31, 2000 from $3.2 million during the comparable  period in 1999.  This
increase is primarily due to start-up and administrative  costs for Egarden Inc.
As a percentage of net sales,  general and administrative  expenses increased to
40.4%  during the three  months  ended  December  31, 2000 from 22.7% during the
comparable period in 1999.

                                                                               9
<PAGE>


Depreciation and amortization.  Depreciation and amortization expenses increased
by $513,000 or 41.5% to $1.7 million  during the three months ended December 31,
2000 from $1.2 million  during the comparable  period in 1999.  This increase is
primarily  as a result of the  acquisition  of  Egarden  Inc.  and  amortization
related to certain  exclusivity  contracts for Egarden Inc. in conjunction  with
depreciation related to the implementation of the Company's new fully integrated
enterprise  resource planning system, QAD MFG/PRO. As a percentage of net sales,
depreciation  and  amortization  expenses  increased  to 15.4%  during the three
months ended December 31, 2000 from 8.7% during the comparable period in 1999.

Loss from operations.  Loss from operations  increased by $3.0 million or 185.3%
to $4.6  million  during the three months  ended  December  31, 2000,  from $1.6
million  during the  comparable  period in 1999.  The loss from  operations  was
primarily due to the seasonal  nature of the Company's  business,  decreased net
sales and the start-up costs for Egarden Inc. of approximately $2.5 million.  As
a percentage of net sales, loss from operations increased to 40.7% for the three
months ended December 31, 2000 from 11.5% during the comparable period in 1999.

Interest  expense.  Net interest expense  decreased  $292,000,  or 15.0% to $1.7
million  during the three  months ended  December  31,  2000,  from $1.9 million
during the  comparable  period in 1999.  The  decrease  in  interest  expense is
primarily related to the Company's repurchase of $6.3 million of the mandatorily
redeemable  trust  preferred  securities of its  subsidiary,  U.S. Home & Garden
Trust I, during the prior twelve months.

Income  taxes.  Income tax benefit  increased to $3.1  million  during the three
months ended December 31, 2000 from $1.6 million during the comparable period in
1999, primarily due to the increase in the net loss before taxes. The income tax
benefit or expense for each interim period is based upon the Company's estimated
effective income tax rate for the year.

Minority  interest in loss of affiliate.  Minority interest in loss of affiliate
increased  $209,000,  net of tax expense of  $222,000,  during the three  months
ended December 31, 2000 from the comparable  period in 1999.  Minority  interest
relates to the Company's partial ownership of Egarden Inc. Egarden's results are
fully consolidated in the Company's financial statements.

Net loss. Net loss increased by $1.0 million,  or 52.5%,  to $3.0 million during
the three months ended December 31, 2000 from $2.0 million during the comparable
period in 1999. Net loss per common share increased $0.06 to $0.16 per share for
the three  months  ended  December  31,  2000 from  $0.10 per share  during  the
comparable  period in 1999.  The  increase  in net loss and net loss per  common
share is primarily  attributable to lower net sales and increased start up costs
for Egarden Inc. in conjunction  with fewer  weighted  average common and common
equivalent  shares  outstanding  in the three  months  ended  December  31, 2000
compared  to the  comparable  period  in the  prior  year  due to the  Company's
repurchase of shares of its common stock.


                                                                              10
<PAGE>


Six Months Ended December 31, 2000 Compared to Six Months Ended December 31,
1999

Net sales. Net sales decreased by $2.7 million, or 9.8%, to $24.5 million during
the six months ended  December 31, 2000 from $27.1 million during the comparable
period in 1999.  The decrease in net sales was  primarily  due to the  Company's
major customers moving to just-in-time inventory management programs,  which the
Company expects will cause revenues to shift to the third and fourth quarters of
its fiscal year.

Gross profit. Gross profit decreased by $1.5 million, or 11.6%, to $11.1 million
for the six  months  ended  December  31,  2000 from  $12.5  million  during the
comparable  period in 1999.  Gross profit as a percentage of net sales decreased
to 45.2%  during the six months  ended  December  31, 2000 from 46.2% during the
comparable period in 1999. The decrease in gross profit was due primarily to the
decrease  in net sales and  reduced  pricing on certain  products  sold to major
retailers when compared to the December 31, 1999 period.

Selling and shipping expenses. Selling and shipping expenses increased $632,000,
or 8.6% to $8.0 million  during the six months ended December 31, 2000 from $7.4
million during the comparable period in 1999. Selling and shipping expenses as a
percentage of net sales  increased to 32.7% during the six months ended December
31, 2000 from 27.2%  during the  comparable  period in 1999.  This  increase was
primarily  attributable to start-up  selling and  development  costs for Egarden
Inc.  partially  offset by less  selling and  shipping  costs as a result of the
decrease in net sales.

General  and  administrative  expenses.   General  and  administrative  expenses
increased  $2.5  million or 39.9% to $8.6  million  during the six months  ended
December 31, 2000 from $6.2 million during the comparable  period in 1999.  This
increase is primarily due to start-up and administrative  costs for Egarden Inc.
As a percentage of net sales,  general and administrative  expenses increased to
35.3%  during the six  months  ended  December  31,  2000 from 22.7%  during the
comparable period in 1999.

Depreciation and amortization.  Depreciation and amortization expenses increased
by $1.0  million or 42.1% to $3.5 million  during the six months ended  December
31, 2000 from $2.4 million during the comparable  period in 1999.  This increase
is  primarily  as a result of the  acquisition  of Egarden Inc and  amortization
related  to certain  exclusivity  contracts  in  conjunction  with  depreciation
related to the  implementation of the Company's new fully integrated  enterprise
resource  planning  system,   QAD  MFG/PRO.   As  a  percentage  of  net  sales,
depreciation and amortization  expenses increased to 14.1% during the six months
ended December 31, 2000 from 9.0% during the comparable period in 1999.

Loss  from  operations.  During  the six  months  ended  December  31,  2000 the
Company's  loss from  operations  increased  by $5.6  million  or 161.4% to $9.0
million during the six months ended December 31, 2000,  from $3.5 million during
the comparable period in 1999. The loss from operations was primarily due to the
seasonal nature of the Company's  business,  the start-up costs for Egarden Inc.
of approximately  $4.9 million and the decrease in net sales. As a percentage of
net sales,  loss from  operations  increased  to 36.9% for the six months  ended
December 31, 2000 from 12.7% during the comparable period in 1999.

Interest  expense.  Net interest expense  decreased  $509,000,  or 13.8% to $3.2
million during the six months ended December 31, 2000,  from $3.7 million during
the  comparable  period in 1999.  The decrease in interest  expense is primarily
related  to  the  Company's  repurchase  of  $6.3  million  of  the  mandatorily
redeemable  trust  preferred  securities of its  subsidiary,  U.S. Home & Garden
Trust I, during the prior twelve months.

                                                                              11
<PAGE>


Income taxes. Income tax benefit increased to $6.0 million during the six months
ended December 31, 2000 from $3.2 million during the comparable  period in 1999,
primarily  due to the  increase  in the net loss  before  taxes.  The income tax
benefit or expense for each interim period is based upon the Company's estimated
effective income tax rate for the year.

Minority  interest in loss of affiliate.  Minority interest in loss of affiliate
increased $426,000, net of tax expense of $439,000,  during the six months ended
December 31, 2000 from the comparable period in 1999.  Minority interest relates
to the Company's  partial  ownership of Egarden Inc.  Egarden  results are fully
consolidated in the Company's financial statements.

Net loss. Net loss increased by $1.8 million,  or 45.7%,  to $5.7 million during
the six months ended  December 31, 2000 from $3.9 million  during the comparable
period in 1999. Net loss per common share increased $0.11 to $0.31 per share for
the six  months  ended  December  31,  2000  from  $0.20 per  share  during  the
comparable  period in 1999.  The  increase  in net loss and net loss per  common
share is primarily  attributable  to decreased net sales and increased  start-up
costs for the Egarden Inc. in conjunction with fewer weighted average common and
common equivalent  shares  outstanding in the six months ended December 31, 2000
compared to the comparable period in the prior year.

Seasonality

The  Company's  sales are  seasonal  due to the  nature  of the lawn and  garden
business,  in parallel with the annual growing  season.  The Company's sales and
shipping  are most  active  from late  December  through  May when home lawn and
garden  customers are purchasing  supplies for spring planting and retail stores
are increasing their inventory of lawn and garden products.  Additionally, since
the Company has better  adjusted its  operations to respond to the  just-in-time
inventory management programs increasingly  utilized by its major customers,  it
expects to ship an  increasingly  larger  proportion  of its total  orders on an
annual basis in the  seasonally  strong  second half of the year.  This shift of
early  seasonal  product  orders from the fiscal  second  quarter into the third
quarter is  expected to result in higher  revenues in both the fiscal  third and
fourth  quarters  compared to the same  period  last year and  resulted in lower
revenues in the second  quarter  compared  to the same  period last year.  Sales
typically decline by early to mid-summer.

Sales of the Company's agricultural products, which were not material during the
three months ended December 31, 2000, are also  seasonal.  Most shipments  occur
during the agricultural cultivation period from March through October.


Liquidity and Capital Resources

Since inception,  the Company has financed its operations primarily through cash
generated by operations;  net proceeds from the Company's private placements and
public sales of securities and borrowings from lending institutions.

At  December  31,  2000,  the  Company  had  consolidated  cash  and  short-term
investments  totaling $7.8  million,  of which $1.6 million is  restricted,  and
working capital of $13.1 million. At June 30, 2000, the Company had consolidated
cash and short-term investments totaling $8.9 million, of which $1.6 million was
restricted,  and  working  capital of $25.1  million.  The  decrease  in working
capital is  primarily  attributable  to the  increase in the current  portion of
lines-of-credit  as result of the start-up costs for Egarden Inc. in conjunction
with the purchase of equipment,  seasonal nature of the Company's business,  net
loss for the period,  repurchase of common stock for treasury and  repayments on
the Company's acquisition line of credit.

                                                                              12
<PAGE>

Net cash used by operating  activities  during the six months ended December 31,
2000 was $7.4 million consisting primarily of the net loss for the six months in
conjunction  with a decrease in accounts  payable and an increase in inventories
offset  in part  by a  decrease  in  accounts  receivable  in  conjunction  with
amortization and depreciation.

Net cash used in investing  activities  during the six months ended December 31,
2000 was $2.9  million,  consisting  primarily  of cash used for the purchase of
property and equipment and package design.

Net cash provided by financing  activities  during the six months ended December
31, 2000 was $9.2 million,  consisting  primarily of proceeds from the Company's
working  capital line of credit offset in part by the repurchase of common stock
for treasury.

On October 13, 1998,  the Company  entered into a credit  agreement (the "Credit
Agreement")  with Bank of  America ,  N.A.(the  "Bank").  The  Credit  Agreement
provides  for a  revolving  credit  facility of up to $25 million to finance the
cost of acquisitions by the Company (the "Acquisition Facility") and a revolving
credit  facility of up to $20 million to finance the Company's  working  capital
requirements  (the "Working  Capital  Facility").  Borrowings  under such credit
facilities bear interest at variable annual rates chosen by the Company based on
either  (i) the London  Interbank  Offered  Rate  ("LIBOR")  plus an  applicable
marginal  rate, or (ii) the higher of 0.5% above the then current  Federal Funds
Rate or the  Prime  Rate  of  Bank of  America,  N.A.,  in  each  case,  plus an
applicable  marginal rate. The Acquisition  Facility terminates at June 30, 2001
and the outstanding  balance is payable in quarterly payments starting with June
30, 2001 and ending with March 31, 2004. The Working Capital Facility terminates
with the balance due on September 30, 2001.  The Company is required to maintain
a zero balance,  under the Working Capital Facility, for at least 30 consecutive
days during the period from July 1 to December 1 of each year. Moreover,  if the
Company  elects to terminate the  financing  agreement  prior to the  expiration
date, the outstanding balance must be prepaid together with a premium of 0.5% of
the total facility.

The  Company's  obligations  under the Credit  Agreement  are  guaranteed by its
subsidiaries  and  secured  by a  security  interest  in  favor  of the  Bank in
substantially  all of the assets of the Company and its  subsidiaries.  Upon the
occurrence  of an  event of  default  specified  in the  Credit  Agreement,  the
maturity of loans  outstanding  under the Credit Agreement may be accelerated by
the Bank,  which may also  foreclose its security  interest on the assets of the
Company and its subsidiaries.

Under the Credit Agreement, the Company and its subsidiaries are required, among
other things,  to comply with (a) certain  limitations  on incurring  additional
indebtedness,  liens and guaranties,  on dispositions of assets, payment of cash
dividends and cash  redemption and  repurchases  of securities,  and (b) certain
limitations on merger, liquidations, changes in business, investments, loans and
advances,  affiliate  transactions and certain  acquisitions.  In addition,  the
Company must comply with certain  financial tests and ratios. A violation of any
of these covenants  constitutes an event of default under the Credit  Agreement.
At  December  31,  2000,  the  Company  was in  violation  of certain  financial
covenants;  however,  a waiver  was  obtained  from the Bank  which  includes  a
reduction of the  Acquisition  Facility to $15 million,  increases  the interest
rate paid under both the Acquisition  Facility and the Working Capital  Facility
by 100 basis points and requires the Company to pay a waiver fee.

The Company has recently  commenced  discussions  with the Bank  regarding a new
credit  agreement  to replace the  expiring  Credit  Agreement.  There can be no
assurances  that a new credit  agreement with the Bank will be executed on terms
equal to or more favorable  than the expiring  Credit  Agreement,  or that a new
agreement  can be completed.  The Company  believes  that, if necessary,  it can
obtain alternate financing from other sources on satisfactory terms.

The Company  believes that its operations will generate  sufficient cash flow to
service the debt it has incurred.  However,  if such cash flow is not sufficient
to service such debt, the Company will be required to seek additional  financing
which may not be available on commercially acceptable terms or at all.

                                                                              13
<PAGE>

As of  December  31,  2000,  the Company  had a net  deferred  tax asset of $2.2
million  primarily  relating to start-up  costs for Egarden Inc. which are being
expensed for book  purposes,  but are  capitalized  for tax purposes as start-up
costs until Egarden Inc. starts  generating  revenue,  at which time these costs
will be amortized over a five-year period. The start-up costs are largely offset
by accumulated tax  depreciation  and amortization in excess of the book amount.
Realization of the $2.2 million deferred tax asset depends on U.S. Home & Garden
Inc.  maintaining its 80% ownership in Egarden Inc. The Company will continue to
evaluate  its  investment  in Egarden Inc. and expects to see early sales orders
generated in the third  quarter for  shipment in the third and fourth  quarters.
While the Company believes that Egarden's  losses will narrow in the future,  if
the losses remain at current levels,  Egarden will require further investment by
the Company or outside equity financing within the next year.

At December 31, 2000, the Company's Trust Preferred obligation was approximately
$57 million. As of January 26, 2001, there were 2,278,019 Trust Preferred shares
outstanding at a market price of $14.00 per share.

New Accounting Pronouncement

In June  1998,  the  Financial  Accounting  Standards  Board  issued  SFAS  133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities".  SFAS  133
requires  companies to recognize all  derivatives  contracts as either assets or
liabilities  in the balance sheet and to measure them at fair value.  If certain
conditions are met, a derivative may be specifically  designated as a hedge, the
objective  of which is to match the  timing of gain or loss  recognition  on the
hedging  derivative with the recognition of (i) the changes in the fair value of
the hedged asset or liability that are  attributable  to the hedged risk or (ii)
the earnings' effect of the hedged forecasted transaction.  For a derivative not
designated as a hedging instrument,  the gain or loss is recognized in income in
the period of change.  SFAS 133 was  effective  for the  Company for the quarter
ending September 30, 2000.

The Company does not hold any  derivative  instruments at December 31, 2000. The
effects of adoption of SFAS 133 were not  considered  material to the  Company's
financial statements.

In June 2000,  the FASB issued  Interpretation  No. 44,  Accounting  for Certain
Transactions  Involving Stock Compensation.  Interpretation No. 44 clarifies the
application  of APB No. 25 for certain  issues  including (i) the  definition of
employee for purposes of applying APB No. 25, (ii) the criteria for  determining
whether a plan  qualifies  as a  non-compensatory  plan,  (iii)  the  accounting
consequences of various  modifications  to the terms of a previously fixed stock
option or award,  and (iv) the accounting for an exchange of stock  compensation
awards in a business combination. This Interpretation is effective July 1, 2000,
but certain conclusions in this Interpretation  cover specific events that occur
after  either  December  15,  1998 or January  12,  2000.  The  Company  did not
experience a material  impact on the financial  statements  upon the adoption of
Interpretation No. 44.

Inflation

Inflation  has   historically  not  had  a  material  effect  on  the  Company's
operations.

                                                                              14
<PAGE>


Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of its variable rate  revolving  credit line, the Company is exposed
to the risk of rising interest rates.  The following table provides  information
on the Company's  fixed maturity debt as of December 31, 2000 that are sensitive
to changes in interest rates.

The Acquisition Line of Credit had an                            $25 million
interest rate ranging from 7.78% to 8.34%
for the six months ended December 31, 2000

The Working Capital Line of Credit had an                        $20 million
interest rate ranging from 7.99% to 8.13% for
the three months ended December 31, 2000.
There was no outstanding balance on the
Working Capital Line of Credit for the
three months ended September 30, 2000.


                                                                              15
<PAGE>


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     Reference  is made to Part  I-Item  3 of the  Company's  Form  10-K for the
     fiscal year ended June 30, 2000 for a description of certain  litigation in
     which the Company is involved.  With respect to the pending  action against
     A.A.B.B., Inc. brought by the Company's subsidiary, Weed Wizard Acquisition
     Corp.,  ("Weed  Wizard"),  in  October  2000  A.A.B.B.,   Inc.  asserted  a
     counterclaim for breach of contract against Weed Wizard alleging that it is
     owed $720,267,  plus interest,  representing  an adjustment to the purchase
     price allegedly required to be made pursuant to the agreement in which Weed
     Wizard acquired  certain  A.A.B.B.  Inc.'s assets.  A.A.B.B.,  Inc. is also
     seeking to recover  attorney's  fees.  The Company denies any liability and
     intends to defend this  counterclaim.  The Kurz v. Weed Wizard action is no
     longer  pending as the action was  recently  voluntarily  dismissed  by the
     plaintiff, without prejudice.


Item 2. Changes in Securities and Use of Proceeds

(c)  During the  quarter  ended  December  31,  2000 the  Company  extended  the
     expiration date of previously issued warrants, plan and non-plan options to
     purchase an aggregate of 3,039,911 shares of common stock at prices ranging
     from $1.69 to $3.25 in transactions  that were exempt from the registration
     provisions  of the  Securities  Act of 1933  by  virtue  of the  exemptions
     provided by Sections 2(a)(3) and/or 4(2) thereof.

Item 6. Exhibits and Reports on Form 8-K

(a)  None.

(b)  No reports on Form 8-K were filed  during the quarter  ended  December  31,
     2000.


                                                                              16
<PAGE>


                                   SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

February 14, 2001

                                              U.S. Home & Garden Inc.
                                              (Registrant)

                                              /s/ Robert Kassel
                                              ----------------------------------
                                              President, Chief Executive Officer

                                              /s/ Donald Rutishauser
                                              ----------------------------------
                                              Chief Financial Officer